One in four children with Type 1 diabetes in a population-based family study has an affected grandparent. We set out to study the clinical and immune features of diabetes in the grandparents' generation, and to examine sharing of HLA class II susceptibility haplotypes between grandparent and grandchild. Of 5855 grandparents in the Bart's-Oxford family study, 428 (7.3%) were known to have diabetes. Clinical data and samples were collected from 115 of 213 surviving affected grandparents and from 219 unaffected grandparents within the same families. Samples were tested for ICA and autoantibodies to GAD and IA-2, and typed for HLA-DRB1-DQA1-DQB1. Transmission of HLA class II haplotype from affected and unaffected grandparents to the diabetic proband was compared. Of 115 affected grandparents studied, the median age at diagnosis was 61 years and at analysis was 73 years; 70% were diet or tablet treated and 30% were on insulin. One or more islet autoantibodies were found in 26% and 66% had one or both of the high risk HLA class II susceptibility haplotypes DRB1*03-DQA1*0501-DQB1*0201 or DRB1*04-DQA1*0301-DQB1*0302. In 79 informative families the HLA class II haplotype of the affected grandparent was transmitted to the proband more frequently than expected overall (59%, p=0.02), and in the insulin-treated subgroups (65%, p=0.03). A total of 7.3% of grandparents reported a clinical diagnosis of diabetes and 2.2% had features of Type 1 diabetes. Genetic susceptibility was shared between grandparents with diabetes and their affected grandchildren. Diabetes in the grandparents of children with Type 1 diabetes often has an autoimmune basis, even when it presents late in life and does not require insulin treatment.